Most new technologies follow a typical
evolution of early hype, later disappointment and eventual
productivity. Here, we position the major technologies that will
impact CRM in 2001, along with the concept of CRM
itself.

The 2001 CRM Hype Cycle

Most new technologies follow a typical evolution of early hype, later
disappointment and eventual productivity. Here, we position the major
technologies that will impact CRM in 2001, along with the concept of CRM
itself.

Most technologies and the strategies that employ them follow a maturity
cycle. Today’s hottest technologies may be tomorrow’s forgotten
capabilities. Many enterprises are currently asking questions about the
customer relationship management (CRM) maturity curve: “What’s hot? What’s
mature? And what does the next 12 to 18 months look like for this
strategy?”

The Gartner "Hype Cycle" model (see Figure 1) has been designed to
bring some clarity to the confusing range of technologies that are
discussed in Gartner research, by vendors and consultants, and in the
popular and trade press. The Hype Cycle moves through five stages (see
Note 1), and at each point, there are critical questions an enterprise
must consider before making a commitment.

Note 1The Hype Cycle
ExplainedGartner’s hype cycle is designed to help enterprises
make intelligent decisions about when to implement emerging technologies.
As is the case with all technology investments, there is no simple answer;
rather, business needs should determine when it makes sense to invest in a
particular new technology.
• Technology Trigger: A
breakthrough, public demonstration, product launch or other event
generates significant press and industry interest.
• Peak of Inflated Expectations:
Overenthusiasm, unrealistic expectations and a flurry of well-publicized
activity by technology leaders results in some successes, but more
failures, because the technology is being pushed to its limits.
• Trough of Disillusionment:
Because the technology has not lived up to its inflated expectations, it
rapidly becomes unfashionable, and the press either abandons the topic for
the next hot thing or emphasizes its failure to meet expectations.
• Slope of Enlightenment: Focused
experimentation and solid hard work by an increasingly diverse range of
organizations leads to a true understanding of the technology’s
applicability, risks and benefits. Commercial off-the-shelf methodologies
and tools become available to ease the development process and application
integration. • Plateau of
Productivity: The real-world benefits of the technology are
demonstrated and accepted. Tools and methodologies are increasingly stable
as they enter their second and third generations. The final height of the
plateau varies according to whether the technology is broadly applicable
or benefits only niche markets.

Enterprises can (and should) invest in technologies across the entire
hype cycle. Some enterprises (especially, Type A companies) will have a
bias toward investing early (see Note 2), accepting high risk in exchange
for a competitive advantage, whereas others will allow their competitors
to make the early mistakes and then rush to catch up (e.g., Type B and
Type C are more likely to do this). The point is always to balance risk
and reward by understanding the actual benefits the enterprise will gain
through implementation, rather than the perceived benefits the "hypsters"
are touting.

Note 2Type A, Type B and Type C
EnterprisesEnterprises are identified as "Type A," "Type B" or
"Type C," based on the aggressiveness with which they adopt and use
technology. Briefly defined:

Type A enterprises (pioneers) are technology-driven and are often
willing to risk using immature, cutting-edge technologies to gain a
competitive edge.

Type B (mainstream) enterprises are moderate technology adopters,
implementing new technologies once they have proved to be useful and
have entered the mainstream.

Type C enterprises (followers) are technologically risk-averse and
cost-conscious; they are usually among the last to adopt new
technologies.

Figure 1

The Gartner Hype Cycle

Source: Gartner Research

The Technology Trigger: Does this really fit into my business
strategy? As technologies become visible, and hype starts to grow
around them, enterprises need to evaluate new solutions in the context of
their CRM strategies (see Figure 2). Some of these technologies will be
customer-facing (e.g., wireless CRM), while others will be internalized,
but will also have an impact on the customer relationship (e.g.,
state-based personalization, which should make marketing offers more
timely). In either case, enterprises need to think about the new
relationship that implementing this technology would enable. They need to
determine whether the value that this new relationship delivers to the
enterprise is worth the risks associated with working with an immature
technology, typically from small and often dubiously viable vendors. In
addition, in many cases, these technologies will be problematic to
integrate, as standards will be immature at best and nonexistent at
worst.

The key to this part of the hype cycle is to realize that the noise
generated by these technologies, especially by the vendors, will be out of
proportion to their true business value. That is not to say that these
technologies are not important. It just means that the hype has
outstripped the usefulness.

The key technologies in this segment are VoIP, wireless CRM and
state-based personalization.

Figure 2

CRM Technological/Concept Hype
Cycle

Source: Gartner Research

The Peak of Inflated Expectations: Will this deliver the
claimed benefits to my enterprise? This is the point in the hype cycle
at which the roar around these technologies is deafening. Every vendor
claims solutions here, the venture capitalists are directing money to
these segments and Type A enterprises are deploying applications as fast
as they can. The problem is that, although these technologies deliver some
benefits, it is virtually impossible for them to live up to the
expectations that have been placed on them. In comparison to what is
expected, these solutions may appear weak. At this point, enterprises need
to be clear about the real benefits gained, not the overhyped ones, and to
make sure that expectations are set properly through out the
enterprise.

This last point is especially important as the next stage emerges.
Overhyped technologies quickly become the victims of cost-cutting when
attitudes change.

The key technologies and concepts in this segment are the contact
center and CRM analytics.

The Trough of Disillusionment: Why did other enterprises fail
with this? This is the period in the hype cycle when the negative
publicity begins to emerge, accompanied by the horror stories, the blame
and the backlash. Gartner places CRM itself at this stage in its
development. The prevalence of stories on privacy, consolidation in the
market and the drying up of venture capital all point to this being a
period of retrenching of CRM, especially in those markets and industries
that are moving into an economic downturn. However, there are two
important things to realize about this stage in the hype cycle. First, it
is normal and necessary. Expectations get ahead of reality, and the market
has to catch up. Second, this does not mean the death of a particular
technology, or of CRM in general. Instead, enterprises should use this as
a time to study what their competitors have done well, and not so well, in
this area. In addition, this can be an important time to gain an advantage
over less-adventurous competitors by making key, reasoned investments,
while they are cutting back on their spending. The key is to position your
enterprise effectively for the inevitable rebound that will follow.

Key technologies and concepts in this segment include rules-based
personalization, campaign management and universal queues.

The Slope of Enlightenment: Can we still gain advantage from
this? In the last stage, something important has happened: the Type B
enterprises (those that use technology when it is in the mainstream) have
come on board. This has been the case with CRM overall. It is
transitioning from a strategy used by Type A enterprises to one now being
implemented by Type B's. When the Type B's discover the technology, and it
has become mainstream, enterprises often find it hard to understand how
they can use it to their advantage. The technologies' very ubiquitousness
makes them seem like examples of competitive parity, rather than
competitive advantage. However, in CRM in particular, it is important to
remember that technology is only an enabler.

The key is what an enterprise can do with the new technology, i.e., the
strategy. The underlying strategy for the deployment of a technology
becomes key at this point in the Hype Cycle. Standards are emerging, and
it becomes easier to evaluate the vendor landscape, but the real advantage
will not come from the technology per se. It will come from how the
enterprise chooses to use it strategically.

Key technologies and concepts in this segment are ERMS, EAI and
affinity marketing programs.

The Plateau of Productivity: Is it "too late" to invest in
this? When a technology reaches the end of the Hype Cycle, it is truly
mature. In fact, it may not even be thought about very much at this point.
Type C enterprises (which tend to lag technology life cycles) are buying,
free-standing vendors have moved to other areas and the capabilities are
often being given away as part of broader suites. At this point, many
enterprises begin to wonder if it is too late to bother with such
products. This is a question that is easier to answer with CRM
technologies than with some others. If the technology will facilitate the
ability of customers — however you define them — to deal with your
enterprise when they want, where they want and how they want, this is
still a technology worth pursuing. That is the key to CRM. Once customers
can do that, your enterprise can use that capability to further account
relationships, making them more profitable and more satisfied. In fact,
that is the key to evaluating any technology on the hype cycle. If it
helps further those customer relationships, it is worth considering. If
not, it is not a valuable area in which to invest.

Key technologies and concepts in this segment include Web
measurement, the call center and ACD.

CRM, as enterprises have known it, is going to change over the next 12
months. That is not a bad development. Enterprises should not
automatically adopt or discount technologies along this Hype Cycle
continuum. Instead, they need to recognize that most technologies will go
through each of these phases at some point, and therefore, they need to
focus on a few key questions that will help ensure that their investments
deliver the expected benefits.